Many individuals who could benefit from bankruptcy have been hesitant to file because they do not believe that they can afford to pay the fees charged by bankruptcy attorneys. Some bankruptcy attorneys have taken advantage of this fact by offering low-cost service that is difficult to refuse by those experiencing severe problems with debt. However, the service provided by these low-cost lawyers is not always up to par. This is not to say that experienced and reliable bankruptcy attorneys with affordable rates do not exist. It just takes a little scrutiny to find them.
Is a Bankruptcy Attorney Necessary?

By the letter of the law, an individual does not need to hire an attorney to file a case in federal bankruptcy court. However, bankruptcy cases can be very complex, and courts are notoriously unforgiving when mistakes occur, relevant information is missing or documents are filed incorrectly. The simplest of mistakes could be cause for a judge to dismiss the case, which causes petitioners to lose their filing fees and begin the process anew. In some instances, the bankruptcy case may go through, but the incorrect or missing documentation could end up costing thousands of dollars or cause a person to forfeit his or her home, car or other personal assets.
Standard Bankruptcy Attorney Fees

The average fees charged by bankruptcy attorneys vary by state and region. What may be an acceptable fee in one state could be outrageously high in another. For example, the average fee in Idaho as of 2009 was $700 while the average fee that same year in Arizona was over $1,500. The fees charged in Illinois and the rest of the Midwest are generally lower than the national average, but may be higher in Chicago and other big cities compared to rural areas.

Bankruptcy judges retain the right to examine fees charged by bankruptcy lawyers and order them to refund excessive amounts back to their clients. A few courts have enacted rules that set the maximum amount that can be charged, and if fees are over that amount, refund orders can be issued to attorneys without review. However, this system has not been enacted in all bankruptcy courts, and the courts stress that such systems are not meant to be used as fee limits.
Fee Amounts and Attorney Experience

The fees charged by bankruptcy attorneys are in no way linked to their experience or qualifications. Many people assume that attorneys who charge higher fees are better than those who charge lower fees, but this is not always true. Although clients should beware of attorneys who charge incredibly low fees, it is not uncommon to find reliable attorneys with proven case histories whose fees are lower than the regional average.

Attorney fees for bankruptcy cases may vary by each case. Complex cases involving large numbers of creditors and multiple assets may cost more than simple cases involving only a few creditors and no assets. The number of times that the attorney must appear in court before a judge, a trustee or a clerk may also affect how much a client is charged. Some attorneys have a simple fee structure that is easily understood. It may be a flat rate for everyone, or each client may be quoted an all-inclusive rate based on case complexity. However, other bankruptcy attorneys may charge a separate fee for each action that has to be made or an hourly fee.
Suspiciously Low Fees

If the advertised rate for a bankruptcy case seems suspiciously low, then potential clients should follow up on their suspicions. Advertised fees in the range of $100 to $300 may be deceptive or misleading. The primary goal of placing ads for these fees is to get people to call and inquire. Once a person has taken the initial step by calling or appearing in person for a consultation, a fast-talking lawyer may be able to get him or her to become a client without any further discussion of fees. Even if the actual fees are disclosed, many people do not want to go through the hassle of visiting other lawyers and simply accept the rate even though it is much higher than advertised.

Bankruptcy lawyers charging extremely low fees may use one of several tactics to raise the fees or add fees to the base rate. These lawyers may state that the number of creditors is over the limit of what is allowed under the base rate or that the amount of the debt is too high for the base rate. Some may even charge more for a joint bankruptcy case than for an individual case.